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Astaldi Talks for Crucial Turkey Sale Are Advancing

(Bloomberg) -- Astaldi SpA’s talks to sell its stake in a Turkish bridge project, a potentially crucial source of funds for the builder that was held up by this summer’s economic crisis, are advancing as it negotiates with a China Merchants Group-led consortium, people familiar with the matter said.

The Chinese investor group’s talks for Astaldi’s 33 percent stake in the project have gathered pace in recent weeks, according to the people. Rome-based Astaldi aims to reach a deal by the end of the year, the people said, asking not to be identified because the information is private.

Astaldi is selling its stake in a venture that controls the Third Bosphorus Bridge linking Europe and Asia, one of the world’s widest suspension bridges, and its associated toll roads. Multiple other Chinese companies remain in discussions to participate in the buyer consortium, according to the people. A bid from the Chinese investor group could value the operations at around $1 billion, one of the people said.

No final decisions have been made, and state-owned China Merchants Group could still decide against an offer, the people said.

Astaldi is counting on cash from the deal to fulfill its pledge to investors to increase its capital and repay debt. Italy’s second-largest builder was forced to file for credit protection on 2.5 billion euros ($2.9 billion) in borrowings after Turkey’s economic crisis, sparked by U.S. sanctions, plunged markets into turmoil in August and held up the sale.

Astaldi’s 750 million euros of bonds due December 2020 reversed earlier losses and were unchanged at 25 cents on the euro at 2:52 p.m. in Italy on Tuesday, according to data compiled by Bloomberg.

The bridge’s owners had wanted an equity value of as much as $1.4 billion when the Chinese consortium previously showed interest, people familiar with the matter said in June. IC Yatirim Holding, Astaldi’s local partner in the venture, may also sell part of its holding, a person said.

Astaldi values its stake, including equity and a shareholder loan, at about 350 million euros, according to a May investor presentation.

London-based Centricus Asset Management remains in discussions about potentially joining the Chinese consortium’s bid, one of the people said. Astaldi’s stake had earlier received interest from other suitors including Harith General Partners, though the South African infrastructure fund later decided against bidding, another person said.

A representative for Hong Kong-based China Merchants Group declined to comment. Representatives for Astaldi, Centricus and Harith General also declined to comment.